John Jastremski Presents:
Phantom stock arrangements are based on a hypothetical investment in company stock. More specifically, phantom stock is the right to receive a cash or property bonus at a specified date in the future based upon the performance of phantom (rather than real) shares of a corporation's common stock over a specified period of time.
- Corporation needs incentive to retain key employees
- Current owners are unwilling to dilute ownership
- Parties want compensation linked to company's growth
- Provides tax deferral for the employee
- Provides tax deduction for the employer
- Helps business to attract, motivate, and retain key employees
- Avoids cumbersome Employee Retirement Income Security Act (ERISA) requirements
- Keeps ownership of business from being diluted
- Minimizes use of corporate funds for payment of compensation
- Corporation's deduction is deferred
- Phantom stock does not provide all of the rights associated with stock ownership
Variations from State to State
- There is some variation in state treatment of stock plans. (Applicable blue-sky requirements should always be consulted any time an issuer issues equity securities to its employees.)
How Is It Implemented?
- Adopt a plan
- Fund the plan
- Award units to employees
This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.
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John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.